Buckeye Partners refinances with $1.5 billion five-year revolver

By Angela McDaniels

Tacoma, Wash., Oct. 6 – Buckeye Partners, LP entered into a new credit agreement on Sept. 30 that provides for a $1.5 billion revolving credit facility due Sept. 30, 2019, according to an 8-K filing with the Securities and Exchange Commission.

Indirect wholly owned subsidiaries Buckeye Energy Services LLC, Buckeye Caribbean Terminals LLC and Buckeye West Indies Holdings LP are also borrowers under the facility.

The borrowers have two one-year extension options.

The revolver has a $500 million accordion feature, a $500 million sublimit for letters of credit and a $150 million sublimit for swingline loans.

The initial interest rate is Libor plus 150 bps, and the initial commitment fee is 22.5 bps. The margin over Libor ranges from 100 bps to 175 bps, and the commitment fee ranges from 12.5 bps to 27.5 bps. Both depend on the company’s credit ratings.

The new credit agreement includes covenants limiting the ratio of the consolidated funded debt to consolidated EBITDA to 5 times. This cap is subject to a provision for increases to 5.5 times in connection with certain future acquisitions.

SunTrust Robinson Humphrey, Inc., J.P. Morgan Securities LLC, Wells Fargo Securities, LLC, Barclays Bank plc and UBS Securities LLC are the lead arrangers and the bookrunners. SunTrust Bank is the administrative agent. JPMorgan Chase Bank, NA and Wells Fargo Bank NA, are the syndication agents. Barclays and UBS are the documentation agents.

The borrowers borrowed $230 million under the new revolver at closing. Proceeds were used to refinance their prior revolving credit facility, which was then terminated, and to cash collateralize outstanding letters of credit and will be used for general corporate purposes, including working capital, capital expenditures and permitted acquisitions.

Buckeye Partners owns and operates refined petroleum products pipeline systems and is based in Houston.

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